Lecture Notes: Negotiation for Project Managers

Importance of Negotiation in Project Management

Negotiation is a key role for project managers.
Engaging with stakeholders, sponsors, clients, suppliers, and contractors is essential.
Recognized by PMI, now included in the PMP exam from January 2021.
- Located in Domain 1: People, Task 8: Negotiating Project Agreements.

A process to find an agreement that satisfies all parties.
Key Principles:
- Process-Based: Follow the process for satisfactory results.
- Integrity: Aim to satisfy all parties, not to "win over" others.

Preparation
- Essential to avoid failure.
- Define scope, goals, and objectives.
- Determine three outcome levels: Ideal, Acceptable, and Bottom Line (BATNA).
- Conduct thorough research: context, players, history, facts.
- Develop strategy and tactics: concessions, priorities, team roles.
Opening
- Make a good impression and build rapport.
- Check the authority of counterparts to make agreements.
- Agree on the negotiation basis, administrative details, and ground rules.
- Clarify ideal outcomes; usually, the seller presents their outcome first.
Bargaining
- Exchange positions, ideas, offers, counteroffers, and concessions.
- Navigate potential standstills toward a nearing agreement.
Closing
- Summarize and ensure all issues are covered.
- Conduct a trial close and make a formal offer.
- Finalize the agreement and avoid any further negotiation-related discussion.
Follow-Up
- Execute all commitments made during negotiation.
- Document and share the agreement internally and with stakeholders.
- Express gratitude to colleagues and counterparts.

Negotiation is straightforward but can be complex due to individual circumstances.
Understanding and managing the stages lead to successful outcomes.